Hewlett-Packard Seeks Dismissal of Investor Hurd Suit

Hewlett-Packard Co. asked a Delaware judge to dismiss a shareholder lawsuit seeking documents related to former Chief Executive Officer Mark Hurd’s departure, saying the request is “overbroad” and fails to set forth a basis to find probable wrongdoing.

Shareholder Ernesto Espinoza sued the company in November over access to corporate documents detailing an internal investigation of Hurd’s relationship with a contractor and the board’s subsequent decision to award him as much as $53 million in severance pay. Espinoza lacks a proper purpose for the inspection, HP said a filing today in Delaware Chancery Court in Wilmington.

Espinoza “has not set forth a credible basis to find probable corporate wrongdoing or mismanagement by the board,” HP’s lawyers said in the filing.

Hurd resigned in August after the Palo Alto, California-based company found that he violated business conduct standards by trying to conceal a personal relationship with former marketing contractor Jodie Fisher. HP’s finding came after Hurd was accused of sexual harassment by Fisher. HP found that Hurd didn’t violate its harassment policy.

Espinoza said in his complaint that HP had grounds to terminate Hurd for cause based on the company’s severance plan. He wants minutes of board meetings in which the company’s investigation of Hurd was discussed.

‘Relevant’ Documents

HP said today in its filing that it already provided Espinoza with “relevant, non-privileged board minutes,” leaving a report on the internal investigation the only document in dispute, according to the court filing.

HP became aware of Hurd’s relationship after he gave a letter from Gloria Allred, Fisher’s attorney, to Michael Holston, the company’s general counsel, according to the filing. HP’s board then directed that an investigation be done. During the course of the probe, HP’s outside counsel interviewed Hurd’s former aide Caprice Fimbres as well as Hurd. The outside lawyers didn’t interview Fisher, according to the filing.

Fimbres, who introduced Hurd to Fisher, resigned in August, the Wall Street Journal reported on Aug. 12.

HP said in court papers that it doesn’t believe the Allred letter is confidential, as claimed by Hurd. The company agreed to designate the letter as “Confidential at the Request of Mark Hurd,” to allow Hurd “an opportunity to reach an agreement with shareholders’ counsel,” according to the filing.

Hurd asked to intervene in the shareholder suit in December to keep the letter sealed. The letter was sent by Allred to Hurd “for the purpose of attempting to arrange a private mediation and/or achieve private resolution” to a potential dispute between Hurd and Fisher, attorneys for the former CEO said in court papers.

The case is Espinoza v. Hewlett-Packard Co., CA6000, Delaware Court of Chancery (Wilmington).

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